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(Matt Rocheleau for Boston.com)

Still vacant, the former Milky Way Lounge near the Hyde Square rotary shut its bowling-pin-for-a-handle door due to high rents over a year and a half ago. (To see a Hyde Square photo gallery, click here.)

By Matt Rocheleau, Town Correspondent

Decades of hard work and progress in Hyde Square transformed an area once known for crime, gang violence, and drugs into a vibrant business district. But now, the square finds itself in the midst of a frustrating setback.

Over the past several years, at least 10 businesses -- including five this year – have shuttered, leaving several once-thriving storefronts vacant for months, if not years.

Some existing shops, meanwhile, have reduced staff and decreased business hours amid the economic downturn, an uptick in crime and, in some instances, dramatic increases in rental rates, according to business owners and officials from neighborhood groups.

The sentiment around Hyde Square, near Jamaica Plain border with Roxbury, has taken a gloomy turn. One salon proprietor said the district’s heart – Centre Street – is a closing or two away from becoming a “ghost town.”

“I don’t know how long I can keep this running,” said Saul Cifuentes, who fears his business, Beauty Master Salon & Supply, won’t survive more than six months and may be next in Hyde Square’s growing list of closures.

But several business owners have faith that the area will rebound, including Ultra Beauty Salon owner Damaris Pimentel who said there is “too much focus on the negative” in Hyde Square, and not enough on new businesses and other developments moving in.

And community organizations that have been involved in cleaning up, maintaining, and gradually improving Hyde Square since the early 1980s, remain optimistic – thanks in part to major area residential projects and retail spaces under construction.

“I don’t think anyone is happy about having any vacancies in the business district, but also, you can’t get frustrated to the point that there’s no progress,” said Yi-Chin Chen, board vice president for Hyde Jackson Square Main Street and a director for the Hyde Square Task Force.

“The fight has been going on for 20 years and it’s a beautiful district, a well-known district and even considered ‘hip,’” she added. “I truly believe some of the things that are happening now will benefit us in the long run.”

The most inspiring changes, being worked on currently, are major housing developments, which will also include new commercial and retail space, in the Hyde and Jackson square areas. The Blessed Sacrament campus’ redevelopment, which opened its first housing units a year ago, will unveil its second finished building Saturday. When completed, that project along with several others scheduled over the next couple of years will have added over 200 affordable housing units to the area.

Chen and local business owners said they hope those potential new customers living a short walk down the road are seen as an incentive for prospective business owners who are considering setting up shop in one of Hyde Square’s vacancies.

Another positive sign, Chen said, is the rising interest in some of the square’s vacancies from outside businesses. She said she could not speak in more detail because the deals are still in negotiation stages.

Still, high rents at several properties have been a major roadblock in filling the spaces. Despite being able to help potential owners in other ways, she said, “We can’t pressure landlords to lower prices.”

Most of the area’s business owners work with one another, according to Chen and several proprietors. And, through all of the closures, an unprecedented number of Hyde Square businesses have applied for grant funding from the district’s main streets group to improve their storefronts, Chen said.

The Main Street group also helps new businesses, such as The Haven restaurant, to become acquainted with the area so they can have a better understanding of what will work, and what won’t, for their business. A recent business inventory study conducted by the JPNDC has helped that effort by providing a better sense of the consumers who visit, or live in and around, Hyde Square, Chen said.

And, though a slight rise in crime and an economic decline have been felt, the consensus in Hyde Square is that the problems are more of a reflection of the rest of the city and much of the nation.

“I think it’s a temporary setback. It’s more of a coincidence that several places in Hyde Square closed in close succession,” she said, adding that the economy, followed by high rental rates have been the primary factors for the recent shut downs.

The 10-year-old tattoo shop has maintained steady business and is planning to move several doors down on Centre Street, where it will occupy a space double its current size and is working with the main streets group to help finance the move.

“We’re doing well,” Hannan said, adding that for the rest of the district, “I’m very optimistic. I’m not worried. I know it will make a comeback.”

There’s no denying it has been a rocky ride for Hyde Square in the past few years, but those like Chen who are optimistic see the current situation as a small setback in an overwhelmingly successful turnaround from the 1980s.

Hyde Square’s tumble began in spring 2009 when two popular, adjacent spaces near the square’s rotary – the still vacant Milky Way bowling alley and Bella Luna restaurant – packed up their respective businesses due to sharp rental increases for a combined venture on Amory Street.

Next to fall was Zon’s restaurant that summer, which has since been replaced by The Haven on Perkins Street. Then, since this spring, a wave of closures have hit the Alchemist restaurant on S. Huntington Avenue and Centre Street locales including La Pupusa Guanaca restaurant, Digna’s salon, June Bug Café and the most recent Velouria Espresso, which closed earlier this fall.

In the past several years Cristal café and restaurant and a jewelry store on Centre Street have also exited.

Replacements are lined up for several of those vacancies: La Pupusa will become soon become Boston Best Pizza and Cristal’s will be a Kennedy Fried Chicken, according to signs hung in their respective storefronts, while another restaurant will replace the Alchemist and Velouria’s old spot is expected to reopen as a new business soon.

And, though those pending new arrivals are uplifting, “The economy is hurting a lot of people,” González said. “The expectations for most of the merchants are pretty low,”

Alan Zhang, owner of the Food Wall, said his business is steady, but it has been hurt since the Milky Way’s move. When the bowling alley used to close at 1 a.m., Zhang’s restaurant would get spillover customers until his shop closed an hour later.